Are you all set to experience an exciting and thrilling entrepreneurial journey? Many start-ups prefer to register private limited companies because of the many advantages it brings with its unique structure. Pvt Ltd company registration gives flexibility in terms of raising funds and limited liability protection.
A Private Limited Company is formed voluntarily with 2 or more than 2 people. The shares are limited to capital subscribed by them and thus they have limited liability. Those shares cannot be subscribed to by the general public. Also, these shares are allotted only to members and cannot be transferred freely.
Although there are certain limitations, private limited company registration gives endless opportunities for entrepreneurs to grow their business. The key benefit is limited liability, which means that the members' personal assets are secure even in case of insolvency of business.
Why should you register a private limited company?
Unlike other structures like sole proprietorship and partnership, a private limited company’s registration data is in the public domain. Investors and customers can easily check and thus build trust in the business easily.
With pvt ltd company registration in India, you keep the doors open for foreign investors. When you decide to expand your business, foreign investors can invest in your business without any government approval. The registration process is simple and there are chances that PLC goes into the international market easily to get global recognition. In this way, PLC structure is suitable for current and potential large-scale businesses in India.
The applicable tax rate is 30% on all the corporate structures such as One Person Company (OPC) and Limited Liability Partnership (LLP). However, in private limited company registration, the tax rates are 25% if you do not exceed annual turnover of ?400 crores. Hence, you can save considerable money on tax. Also, the business can pay dividends to shareholders so that they also get a higher benefit.
Employees are the most important resources for every company. To retain talented employees in the competitive market, a PLC can offer ESOPs to give benefits to the employees as well as the company. This is possible only when you register a pvt ltd company in India.
It is easy to raise funds through sweat equity, venture capitalists, angel investors, private placement and many more. A PLC can enjoy easy fundraising and no other business structure offers this kind of flexibility. Funds play an important role to grow and establish the business. If you want to grow your business quickly, you need potential investors. It will have a prominent effect on your business. Read our blog to know more about Funding in a Pvt Ltd Company.
There is clear bifurcation of roles and responsibilities in a pvt ltd company structure. Shareholders have voting rights and Directors are responsible for daily operations. Thus, shareholders can get involved in identifying and making the most of new opportunities to take the business ahead as Managers focus on everyday business activities. Shareholders and managers independently enjoy ownership and managerial rights that will lead to the fast growth of the business.
Another key benefit when you register a private limited company is that it offers a financial liability balance. The company handles the overhead burden of the shareholders and safeguards their personal assets.
PLC has a perpetual succession and a separate legal entity. The company has a right to sue any entity in case of misconduct. It brings security to the business and therefore, start-ups prefer to incorporate PLC.
Bottom Line
When you go ahead with private limited company registration, especially for your start-up, it opens several new avenues for growth and expansion. You can be well on your way to achieve your goals. The Indian government can further help you with several benefits like tax exemption. If you’re ready, then the experts at the leading LegalTech company- LegalWiz.in can be the ideal partners to make the entire process quick and hassle-free. Wishing you all the success!
